Property developer's housing projects damaged by attempted land grabs

JOHANNESBURG - Calgro M3 Holdings, the listed property and private memorial parks developer, experienced attempted land grabs that resulted in about 200 housing units in its Scottsdene project in the Western Cape and 150 units in its Fleurhof project in Gauteng being badly damaged.

But Wikus Lategan, the chief executive of Calgro, said yesterday that he believed these were criminal activities to benefit certain individuals that were disguised as politically motivated land grabs.

“It’s vandalism more than land grabs. We believe this will increase not decrease (as the country moves) towards the 2019 general elections,” he said.

Lategan said these incidents occurred post its financial year to February and the damage was still being determined, but Calgro was fully insured.

He admitted there were always interpretations with insurance claims but stressed the damage caused would not have any material effect on the group.

Lategan said the badly damaged units were almost completed, but their doors were broken and they were stripped of geysers, taps, electricity distribution boards, and the like.

“In one block in Scottsdene, they broke each and every window. It’s very violent. We monitor all our property at least once a day and have action plans in place to deal with any illegal invasions,” he said.

Calgro has a total residential property pipeline comprising 54376 opportunities, with an unescalated revenue of R25.3billion across South Africa. Lategan said R20bn of this would take between five and six years to develop, while the remaining R5bn would have a 10-year rollout.

Earnings

Calgro yesterday reported a 7percent growth in core headline earnings a share to 143.47cents in the year to February from 134.12c.

Revenue rose by 12percent to R1.74bn from R1.55bn.

Operating profit declined to R149.9million from R228.9m, but increased by 3.4percent after the reversal of unrealised profit adjustment.

The group’s financial performance was impacted by the construction of units for the Reit JV, in which Calgro has a 49percent shareholding, resulting in 49percent of the development profit being eliminated on consolidation as an unrealised profit.

Lategan said the group’s performance was lower than expected, because of challenging political and associated economic conditions and delays in raising working capital as the group increased its focus on private sector residential property developments.

But he said the group
secured the first tranche
of international funding in November valued at R278m from Proparco, a subsidiary of the French development agency, with the R109m balance due towards the middle of this year.

Lategan said the primary focus area for the residential property development business in the coming year would be to roll out the existing pipeline, while a targeted contribution of more than 10percent from memorial parks was set for the coming financial year.

“This rather ambitious target is supported by grave sales that are increasing month-on-month, coupled with ongoing improvements and advancements within the business,” he said.

Of the first tranche of 3852 residential rental investment units, 648 were complet handed over to the Afhco Calgro M3 consortium in November.

Calgro shares gained 2.86percent on the JSE yesterday to close at R14.40.